The distinction lies (as far as I know) in whether or not a person has actual physical withdrawal symptoms when denied access to whatever it is they're addicted to. No withdrawal, then it's a habit. But some people these days claim you can also have a mental addiction, so I don't know what the current current medical terminology is, for sure.

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an addiction is something you crave very badly and can't give up. Like drugs, alckil, cigarettes, EP. A habit is a minor flaw, like chewing your nails, cracking your knuckles, nervous sweating, never asking for directions or help.